Need for the State to step in (through SEBs) to extend electrification (so far limited to cities) across the country.

Main amendments to the Indian Electricity Supply Act

Amendment in 1975 to enable generation in Central sector.

Amendment to bring in commercial viability in the functioning SEBs – Section 59 amended to make the earning of a minimum return of 3% on fixed assets a statutory requirement (w.e.f 1.4.1985) .

Amendment in 1991 to open generation to private sector a establishment of RLDCs.

Amendment in 1998 to provide for private sector participation transmission, and also provision relating to Transmission Utilities.

The Electricity Regulatory Commission Act, 1998

Provision for setting up of Central / State Electricity Regulatory Commission with powers to determine tariffs.

Constitution of SERC optional for States.

Distancing of Government from tariff determination.

The Electricity Act, 2003

The Electricity Bill, 2001 was introduced in Lok Sabha on 30th August, 2001 and was subsequently referred to the Standing Committee on Energy for examination and report. The Standing Committee submitted its report on 19th December, 2002. Based on the recommendations of the Standing Committee on Energy, the Government of India moved certain amendments. The Electricity Bill, 2001 along with these amendments, was passed by Lok Sabha on 9th April, 2003.

The Bill as passed by Lok Sabha was considered and passed by Rajya Sabha on 5th May, 2003. The Electricity Bill, 2003 as passed by both Houses of the Parliament received President’s assent on 26th May, 2003 and was notified in the Gazette of India on 2nd June, 2003.The provisions of the Act except section 121 were brought into force with effect from 10th June 2003.

Background and salient features of the Act :

Power is today a basic human need. It is the critical infrastructure on which modern economic activity is fully dependent. Only 55% households in India have access to electricity. Most of those who have access do not get uninterrupted reliable supply. The industry in India has among the highest tariffs in the world and is not assured of the quality of supply.

In this era of globalisation, it is essential that electricity of good quality is provided at reasonable rates for economic activity so that competitiveness increases.Being internationally competitive is now essential for achieving the vision of 8% GDP growth per annum, employment generation and poverty alleviation.

In recent years the financial health of SEBs has been deteriorating. There is a big gap between unit cost of supply and revenue and the annual losses of SEBs have been increasing and have reached unsustainable levels (over Rs. 33,000 crores).

In the last two Plan periods, barely half of the capacity addition planned was achieved. The optimistic expectations from the IPPs have not been fulfilled and in retrospect it appears that the approach of inviting investments on the basis of government guarantees was perhaps not the best way. The energy as well as peaking shortages across the country is a matter of concern and the situation would have been worse but for the slowdown in manufacturing sector.

The Hon’ble Prime Minister and Chief Ministers have set before the nation the goal of electrifying all our villages by 2007 and all our households by 2012. Access is yet to be provided to about 80,000 villages. Uninterrupted and reliable supply of electricity for 24 hours a day needs to become a reality for the whole country including rural areas. Enough generating capacity need to be created to outgrow the situation of energy and peaking shortages and make the country free of power cuts with some spare generating capacity so that the system is also reliable. The sector is to be made financially healthy so that the state government finances are not burdened by the losses of this sector. The sector should be able to attract funds from the capital markets without government support. The consumer is paramount and he should be served well with good quality electricity at reasonable rates.

It is in this context that the Electricity Act, 2003 seeks to bring about a qualitative transformation of the electricity sector through a new paradigm. The Act seeks to create liberal framework of development for the power sector by distancing Government from regulation. It replaces the three existing legislations, namely, Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998. The objectives of the Act are “to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto.”

The Act strikes a balance which takes into account the complex ground realities of the power sector in India with its intractable problems.

The salient features of the Act are:

1. Generation has been delicensed and captive generation freely permitted.i.e. Any generating company may establish, operate and maintain a generating station without obtaining a licence under this Act with only exception that it should comply with the technical standards relating to connectivity with the grid referred to in clause (b) of section 73.

2. No person shall
(a)transmit electricity; or
(b)distribute electricity; or
(c)undertake trading in electricity,
unless he is authorised to do so by a licence issued, exceptions informed by authorised commissions through notifications

3. No license required for generation and distribution in rural India

4. Central Government may, make region- wise demarcation of the country, and, from time to time, make such modifications therein as it may consider necessary for the efficient, economical and integrated transmission and supply of electricity, and in particular to facilitate voluntary inter-connections and co-ordination of facilities for the inter-State, regional and inter-regional generation and transmission of electricity.

Transmission utility at the central and state level to be a government company-with responsibility of planned and coordinated development of transmission network

5. Open access in transmission with provision for surcharge for taking care of current level of cross subsidy, with the surcharge being gradually phased out.

6. The state government required to unbuldle State Electricity boards. However they may continue with them as distribution licensees and state transmisison utilities

7. Setting up state electricity regulatory commission (SERC) made mandatory

8. An appellate tribunal to hear appeals against the decision of (CERC’s) and SERC’s

9. Metering of electricity supplied made mandatory

10. Provisions related to thefts of electricity made more stringent

11. Trading as, a distinct activity recognised with the safeguard of Regulatory commissions being authorised to fix ceiling on trading margins

12. For rural and remote areas stand alone system for generation and distribution permitted

The Electricity (Amendment) Bill, 2005

The Electricity (Amendment) Bill, 2005 was introduced in the Lok Sabha on December 23,2005 to amend the Electricity Act, 2003. The Bill was referred to the Parliamentary Standing Committee on Energy (Chairperson: Shri Gurudas Kamat), which was scheduled to submit its report on March 23, 2006.

The Bill proposes to amend the Act by deleting the provision for ‘elimination’ of cross subsidies. It , however, retains the provision for reduction of cross subsidies. The provision was deleted taking into concern the fact that it might not be possible to eliminate cross subsidies in the near future.

The Bill seeks to provide that both the Central Government and State Government would jointly attempt to supply electricity to all areas including villages and hamlets through rural electricity infrastructure and electrification of households. In the Act, the onus of rural electrification was solely on the State Government.

The offences relating to theft of electricity, electric lines, and interference with meters are cognizable offences. There was concern that the Act stood as a barrier to investigation of these offences by the police. The Bill seeks to amend the section in the following manner:

It emphasizes that a person cannot be prosecuted for any offence punishable under the Act without the permission of the Central Government or Appropriate Commission or a Chief Electrical Inspector or an Electrical Inspector or licensee or the generating company. An Appropriate Commission could be the Central Regulatory Commission or State Regulatory Commission or Joint Commission.

It clarifies that the police have the power to investigate cognizable offences under the Act.

In order to facilitate speedy trials, it provides that a Special Court (the state government can constitute any number of Special Courts for such areas as may be specified, to facilitate speedy trials of offences) shall be competent to take cognizance of an offence without the accused being committed to it for trial.

Finances

The Financial Memorandum of the Bill estimates that the Rajiv Gandhi Grameen Vidyutikaran Yojana (with an outlay of Rs 16,225 crore) would have a subsidy component of Rs 14,750 crore to be funded from the Consolidated Fund of India in two phases. Phase 1 of the scheme has begun from the financial year 2005-2006 with a sanction of Rs 5,000 crore of subsidy from the Consolidated Fund of India. No other expenditure, recurring and non recurring, from Consolidated Fund of India would be involved.

11 Responses to Electricity Regulation

sir,in India so many people not paying electricity bills it may cause heavy burden to government and citizens who pay regularly. to prevent that I am having an advice which the electricity meter providing from department it should be programmed in soft ware based which can be automatically cut the power if person miss manage or not paying dues to the department.in this way we are having so many benifits,like man power management ,and system under control .

The Indian Telegraph Act 1885 must not be invoked in power sector through article 164 of EA 2003 but must be kept limited to telephone lines only because the size of footing for towers is quite substantial and 01 katha or 02 katha of land is permanently occupied by the tower with no further commercial activity possible. Besides, even cultivation is quite a problem inside the tower footing area. There is an urgent requirement of proper law to avoid the currently going on disputes and conflicts with the land owners and the executing agencies.

Enact Proper legal framework for compensation to land owners in transmission line construction. It is necessary to assess the compensation to cultivator/share cropper/tenant as well while disbursing the crop compensation. Moreover, the data regarding yield and rate of crops must be put on internet for every block/district. The rates should be subject to revision every 06 months so that actual compensation is paid. There should be separate treatment of the land owner with tower footing and the farmers surrounding to have distinction.

The transmission line construction works are hampered by lack of laws pertaining to compensation and ROW problems. The basic problem is that there is no framework/guidelines for negotiation with the land owners/sharecroppers and so on which means the matter is dealt on case to case basis and it leads to lack of confidence in the personnel involved in construction works. The payment of crop compensation is very unclear and confusing issue as the land owner and cultivator may be different and both want some compensation. The forum may spread awareness among the readers so that some proper legislation is evolved for the transmission sector

Subject: Suggestion – India Generating the Electricity. We are wasting the generated Electricity without consuming. But, we are saying Shortage of Electricity in India.
Dear Sir
For above Subject we are introducing with bellow example.
Example:
(The Government is providing water supply to your houses. The Government will record your water consumption through Main Meter from the delivery point to your house.
But in your house lot of water wastages are happening through pipe line leakages, tank overflow etc.
So, the wasted water not coming in to your utilizations.
Now, you tell me that your consumptions of water should be billed by the Government adding the Wastages of water or not adding?
Your Consumption should be billed from the Main meter from the delivery point.

Because wastages are negligence of Consumers, so the Government should bill to consumers only from the main meter not from consumer utilized quantity.
But in TNEB not happening, TNEB not billing the Wasted Electricity, why? Due to that all are suffering badly. This Engineering mistake is happening in all state of the India but Delhi implemented the bellow suggestion on year 2002.
THE GOD will bless always to you all and your family for making the Green Revelation in India.

Why Electricity Shortage and Tariff Hike in India?
The main reason is that in India all states Electricity boards are generating the Electricity, but consumers are wasting the Generated Electricity without Consumption.
HOW?
We are explaining here very simply from the Electrical Engineering Subject.

To understand the Wastages of Electricity and Tariff Hike, it is helpful to understand the three different types of Power in Electrical Systems.

1. Real Power is the power that is actually converted into useful work for creating heat, light and motion. Real power is measured in kilowatts (kW) and is totalized by the electric billing meter in kilowatt-hours (kWH).

2. Reactive Power is the power used to sustain the electromagnetic field in inductive and capacitive equipment. It is the nonworking power component. Reactive power is measured in kilovolt-amperes reactive (kVAR).

3. Total Power or Apparent power is the combination of Real Power and Reactive power.

Total Power (KVAH) = Real Power (KWH) + Reactive Power (KVARH)

Total power is measured in kilovolt-amperes (kVA) and is totalized by the electric billing meter in kilovolt-ampere-hours (kVAH).

When any consumer is using Electricity to operate the inductive load equipment’s like Fluorescent lights, Air Conditioner, Induction Motors, Arc welding machine and Transformers, this equipment’s are destroying the Reactive Power (KVAR).
So recover the above type KVAR losses, the Electrical Engineering Subjects and all states Electricity Regulatory Commission are asking to the Consumers to fix the Capacitors near to their Induction load equipment’s and for recover the KVAR losses.

Next, all states the Electricity Regulatory Commissions are ordering to the Government Electricity Board to fix the Capacitors with Automatic Power factor Controller system to maintain ZERO level KVAR losses in the following areas.
A) Distribution transformer end
B) Substation end of 11/22KV distribution feeders
C) Substation
D) Generating Stations

But in Practical, the Consumers and Government Electricity Board are not following fully as per Electrical Engineering Subject instructions and Electricity Regulatory Commission order because the Government Electricity Board is asking to minimize the KVAR losses only to the HT consumers but not to other all type of Consumers. Next, the Government Electricity boards also not able maintain the ZERO level KVAR losses in their all Sub Stations due to heavy major level KVAR losses in HT Consumers and other all type of Consumers (Except HT Consumers).
To calculate and identify the KVAR losses in the TNEB KVAH Units, the TNEB is using the Electrical Engineering Formula is as follows:
Power Factor = KWH/KVAH (The Measure of Electrical Efficiency is known as Power Factor)
The Highlight notice to all is that the above said formula is officially demanded by Government only to the HT Consumers for measure their made KVAR losses. And this formula is not applied through Government Order (GO) to other all type of consumers for measure their made KVAR losses.
In HT Consumer also Government required Power Factor is 0.9, i.e. 10% KVAR loss.
Once we see the 1. HT Consumers made their KVAR losses and 2. All type of other Consumers made their KVAR losses to the Government (Government Generated Units loss and Generated Unit Cost losses) automatically we all will come out from the dark to lights for taking actions on these losses.
Understanding the fact and figure, we have made the Example from the Tamilnadu Electricity Board Published consumers consumed report for the financial year 2011 – 2012.
Note: Knowing the losses of Energy and Cost the data’s are used for calculation purpose but it may vary in real.

We are giving the fact and figure of the above said 1.UNIT LOSSES and 2.UNIT COST LOSSES from the Tamilnadu Electricity Board published Consumer Consumption report for the Financial Year 2011 – 12.
SL. No. HT Consumers
KWH Units -
Millions
TNEB Supplied KVAH Units
REMARKS

- Above losses to India for the financial year 2011 -12 and the said losses are increasing every year and for all three losses the basic reason is ONE. i.e.
Government Electricity Board is giving the Electricity to the Consumers is in the formulation of KVAH, But billing to consumers and Collecting money from Consumers from their KWAH consumption.
So, then who will recover the NOT BILLED KVAR Units losses to the Government? And who will pay the not CLAIMED generated Units Cost to Government?
Government is putting all above losses in their accounts.
So recover the todays Electricity Shortage in India and reduce the Tariff hike to Consumers, The Central Electricity Regulatory Commission should come front for taking action strongly for giving benefit to the Publics and Government.

Due to not maintaining the Proper Power Factor in HT Consumers, Commercial Consumers and Government Generation plant, Government Sub Stations and Government Distribution Stations Gene, the poor residential peoples of non-inductive load users are penalized by Power Cut and Tariff hike. Is it justified? This is total failures of the Electrical Engineers.
Our Suggestion to the Central Electricity Regulatory Commission is that:
First level required Implementation:
1. To HT Consumers:-
All new HT Consumers Electrical drawings should be approved by CEIG (Chief Electrical Inspector to Government) against the available proper Capacitors and Automatic Power Factor Controller in their Electrical systems for maintaining ZERO level KVAR losses (Maintaining Unity Power Factor).
All Existing HT Consumers if not maintain the Unity Power Factor, they should be implemented by adequate Capacitors with Automatic Power Factor Controller in their electrical systems for maintaining ZERO level KVAR losses (Maintaining Unity Power Factor) within three months period time..
All HT consumers’ consumptions should be billed through KVAH Units not by KWH Units.
2. All Type Other Consumers:- (Except HT Consumers) –
All new Consumers connection to be given based on available Capacitors for induction loads equipment and KVAH meters to be fixed for billing their consumptions. Then automatically their consumption will come less and they will not blame to the Government.
All Existing Other Type Consumers should be instructed officially by the Government that present induction loads to be converted in to non-inductive load or Capacitors should be connected within three months period time if any inductive loads in their electrical systems. During that time period Government should remove the existing KWH meters and to be fixed KVAH meters. After three months KVAH meter billing system should be adopted in entire states of India for all type of consumers except non inductive load consumers of residential and for them not required to replace KWH meters immediately.

Second level required Implementation to the Government Sub Stations-
Maintaining the Zero level KVAR losses (Unity Power Factor) in the TNEB Sub Stations are based on the minimum level/Zero level KVAR losses in the Consumer side. Without Consumer support, Government Substations alone cannot maintain Good Power Factor.
First the KVAR losses to be minimized fully in the consumer end and from the recovered units cost financial support all the Government Sub Stations should be strengthened by adding capacitors and connecting Automatic Power Factor Controller systems.

Third level required Implementation to the Government Electricity Board -
Government generated electricity wastage is equivalent to the power theft. So, need separately one Department and team in the Government for Monitoring the KVAR losses and maintaining the Unity Power Factor in the Consumers end.
Kindly try to consider our suggestion of “Remove the KWH billing systems and adopt KVAH billing systems to all type consumers” in all states Electricity board in India.
“THE GOD” will bless to you all by implementing said Suggestion in INDIA.
My sincere thanks and regards to “THE GOD” for giving opportunity to write this letter to you all.
Thanking You
With Regards
Sincerely

Student Partner

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